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(Edgar Glimpses Via Acquire Media NewsEdge)
You should read the following discussion and analysis of our financial condition
and results of operations together with our financial statements and
accompanying notes included elsewhere in this quarterly report on Form 10-Q. In
addition to the historical information, the discussion in this quarterly report
on Form 10-Q contains certain forward-looking statements that involve risks and
uncertainties. Our actual results could differ materially from those anticipated
by the forward-looking statements due to our critical accounting estimates
discussed below and important factors set forth in this quarterly report on Form
10-Q, including under "Risk Factors" in Part II, Item 1A of this quarterly
report on Form 10-Q.

Overview
Our Business
We are a global biopharmaceutical company focused on saving lives, alleviating
suffering and contributing to the economics of healthcare by focusing on 3,000
leading acute and intensive care hospitals worldwide. We market Angiomax®
(bivalirudin), Recothrom® Thrombin topical (Recombinant), Cleviprex®
(clevidipine) injectable emulsion and Minocin® IV (Minocycline for Injection).

We also have a pipeline of acute and intensive care hospital products in
development, including five product candidates for which we have submitted
applications for regulatory approval or plan to submit applications for
regulatory approval in 2014. which we refer to as our registration stage product
candidates, cangrelor, oritavancin, IONSYSTM (fentanyl iontophoretic transdermal
system), FibrocapsTM and RPX-602, and three research and development product
candidates, MDCO-216, CarbavanceTM and ALN-PCSsc. We believe that these marketed
products and products in development possess favorable attributes that
competitive products do not provide, can satisfy unmet medical needs in the
acute and intensive care hospital product market and offer, or, in the case of
our products in development, have the potential to offer, improved performance
to hospital businesses.

In addition to these products and product candidates, we sell a ready-to-use
formulation of Argatroban and have a portfolio of ten generic drugs, which we
refer to as our acute care generic products, that we have the non-exclusive
right to market in the United States. We are currently selling three of our
acute care generic products, midazolam, ondansetron and rocuronium. We also
co-promote the oral tablet antiplatelet medicine BRILINTA® (ticagrelor) in the
United States as part of our global collaboration agreement with AstraZeneca LP,
or AstraZeneca, and the Boston Scientific Promus PREMIERTM Everolimus-Eluting
Platinum Chromium Coronary Stent System, or Promus PREMIER Stent System, in the
United States under our co-promotion agreement with Boston Scientific
Corporation, or BSX. In addition, on May 1, 2014, we acquired Tenaxis Medical,
Inc., or Tenaxis. As a result of the acquisition of Tenaxis, we acquired
Tenaxis's sole product, which we refer to as the Tenaxis product. The Tenaxis
product mechanically seals both human tissue and artificial grafts. In the
United States, the Tenaxis product received premarket approval from the U.S.

Food and Drug Administration, or FDA, in March 2013 for use as a vascular
sealant, but Tenaxis has not yet commercialized the Tenaxis product in the
United States. We expect to begin selling the Tenaxis product in the United
States in the fourth quarter of 2014. In the European Union, the Tenaxis product
is approved for sale as a surgical sealant applicable to cardiovascular,
general, urological, and thoracic and has a European CE Mark. Pursuant to this
approval, Tenaxis has been selling the product in the European Union since
September 2008.

The following chart identifies, as of March 31, 2014, each of our marketed
products and our products in development, their stage of development, their
mechanism of action and the indications for which they have been approved for
use or which they are intended to address. The following chart also identifies
each of our acute care generic products and the therapeutic areas which they are
intended to address. All of our marketed products and products in development,
except for Recothrom, IONSYS, ALN-PCSsc and Fibrocaps, are administered
intravenously. Recothrom is, and Fibrocaps is being developed as, a topical
hemostat, IONSYS is being developed to be administered transdermally and
ALN-PCSsc is being developed as a subcutaneous injectable. All of our acute care
generic products are injectable products.

Product or Product Development Stage Mechanism/Target Clinical
in Development Indication(s)/Therapeutic
Areas
Marketed Products
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Angiomax Marketed Direct thrombin U.S. - for use as
inhibitor an anticoagulant in
combination with
aspirin in patients
with unstable
angina undergoing
percutaneous
transluminal
coronary
angioplasty, or
PTCA, and for use
in patients
undergoing
percutaneous
coronary
intervention, or
PCI, including
patients with or at
risk of heparin
induced
thrombocytopenia
and thrombosis
syndrome, or
HIT/HITTS
Europe - for use as
an anticoagulant in
patients undergoing
PCI, adult patients
with acute coronary
syndrome, or ACS,
and for the
treatment of
patients with
ST-segment
elevation
myocardial
infarction, or
STEMI, undergoing
primary PCI
Recothrom Marketed in the Recombinant human For use as an aid
United States and thrombin to hemostasis to
Canada help control oozing
blood and mild
bleeding during
surgical procedures
Cleviprex Marketed in the Calcium channel U.S. - Blood
United States and blocker pressure reduction
Switzerland when oral therapy
is not feasible or
Approved in not desirable
Australia, Austria, Switzerland - with
Belgium, Canada, indications for
France, Germany, blood pressure
Luxembourg, the control in
Netherlands, New perioperative
Zealand, Spain and settings
the United Kingdom Ex-U.S. - with
indications for
MAA submitted for blood pressure
other European control in
Union countries perioperative
settings
Minocin IV Marketed in the Tetracycline-class Treatment of
United States antibiotic bacterial
infections caused
by Acinetobacter
species
Ready-to-use Marketed in the Direct thrombin Approved for
Argatroban United States inhibitor prophylaxis or
treatment of
thrombosis in adult
patients with HIT
and for use as an
anticoagulant in
adult patients with
or at risk for HIT
undergoing PCI
Acute care generic Approved in the Various Acute
products: Adenosine, United States cardiovascular
Amiodarone, Esmolol
and Milrinone
Acute care generic Approved in the Various Serious infectious
products: United States disease
Azithromycin and
Clindamycin
Acute care generic Approved in the Various Surgery and
products: United States; perioperative
Haloperidol, Midazolam,
Midazolam, Ondansetron and
Ondansteron and Rocuronium marketed
Rocuronium in the United
States
Registration Stage
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Cangrelor NDA in the United Antiplatelet agent Prevention of
States accepted for platelet activation
filing by the FDA and aggregation when
in the third oral therapy is not
quarter of 2013; feasible or not
MAA accepted for desirable
review in the
European Union in
the fourth quarter
of 2013
Oritavancin NDA in the United Antibiotic Treatment of serious
States accepted for gram-positive
filing by the FDA bacterial
in the first infections,
quarter of 2014; including acute
MAA accepted for bacterial skin and
review in the skin structure
European Union in infections, or
the first quarter ABSSSI, and
of 2014 including infections
that are resistant
to conventional
treatment
IONSYS Supplemental New Patient-controlled Short-term
Drug Application, analgesia system management of acute
or sNDA, submission postoperative pain
planned for the
first half of 2014;
MAA submission in
European Union
planned for the
middle of 2014
Fibrocaps Phase 3 completed; Dry powder topical For use as an aid to
Biologics License formulation of stop bleeding during
Application, or fibrinogen and surgery
BLA, submitted in thrombin
the United States
in the first
quarter of 2014 and
accepted for filing
by the FDA in April
2014; MAA
submission in the
European Union
accepted for review
by the EMA in the
fourth quarter of
2013
Treatment of
NDA submission in Improved infections caused by
the United States formulation of Acinetobacter
RPX-602 planned for 2014 Minocin IV species
Research and
Development Stage
MDCO-216 Phase 1 Naturally occurring Reversal cholesterol
variant of a transport agent to
protein found in reduce
high-density atherosclerotic
lipoprotein, or HDL plaque burden
development and
thereby reduce the
risk of adverse
thrombotic events
Carbavance Phase I completed, Combination of Treatment of
expect to enter RPX-7009, a hospitalized
Phase 3 clinical proprietary, novel patients with
study in the second beta-lactamase serious
half of 2014 inhibitor, with a gram-negative
carbapenem infections
antibiotic
ALN-PCSsc Phase 1 PCSK-9 gene Treatment of
antagonist hypercholesterolemia
addressing
low-density
lipoprotein, or
LDL, cholesterol
disease
modification
Our revenues to date have been generated primarily from sales of Angiomax in the
United States. In the three months ended March 31, 2014, we had net revenue from
sales of Angiomax of approximately $155.7 million, net revenue from sales of
Recothrom of approximately $13.5 million and net revenue from sales of
Cleviprex, ready-to-use Argatroban and Minocin IV of approximately $8.0 million
in the aggregate.

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We continue to expand our sales and marketing efforts outside the United States.

We believe that by establishing operations outside the United States, we can
increase our sales of Angiomax outside of the United States and be positioned to
commercialize Cleviprex, Recothrom and Minocin IV and our products in
development, if and when they are approved and ready to be marketed outside of
the United States.

Cost of revenue represents expenses in connection with contract manufacture of
our products sold and logistics, product costs, royalty expenses and
amortization of the costs of license agreements, amortization of product rights
and other identifiable intangible assets, from product and business
acquisitions. Research and development expenses represent costs incurred for
licenses of rights to products, clinical trials, nonclinical and preclinical
studies, regulatory filings and manufacturing development efforts. We outsource
much of our clinical trials, nonclinical and preclinical studies and all of our
manufacturing development activities to third parties to maximize efficiency and
minimize our internal overhead. We expense our research and development costs as
they are incurred. Selling, general and administrative expenses consist
primarily of salaries and related expenses, costs associated with general
corporate activities and costs associated with marketing and promotional
activities. Research and development expense, selling, general and
administrative expense and cost of revenue also include share-based compensation
expense, which we allocate based on the responsibilities of the recipients of
the share-based compensation.

Angiomax Patent Litigation
The principal U.S. patents covering Angiomax include U.S. Patent No. 5,196,404,
or the '404 patent, U.S. Patent No. 7,582,727, or the '727 patent, and U.S.

Patent No. 7,598,343, or the '343 patent.

In the second half of 2009, the U.S. Patent and Trademark Office, or PTO, issued
to us the '727 patent and the '343 patent, covering a more consistent and
improved Angiomax drug product and the processes by which it is made. The '727
patent and the '343 patent are set to expire in July 2028. In response to
Paragraph IV Certification Notice letters we received with respect to
abbreviated new drug applications, or ANDAs, filed by a number of parties with
the FDA seeking approval to market generic versions of Angiomax, we have filed
lawsuits against the ANDA filers alleging patent infringement of the '727 patent
and '343 patent.

On September 30, 2011, we settled our '727 patent and '343 patent infringement
litigation with Teva Pharmaceuticals USA, Inc. and its affiliates, which we
collectively refer to as Teva. In connection with the Teva settlement, we
entered into a license agreement with Teva under which we granted Teva a
non-exclusive license under the '727 patent and '343 patent to sell a generic
bivalirudin for injection product under a Teva ANDA in the United States
beginning June 30, 2019 or earlier under certain conditions. The license
agreement also contains a grant by Teva to us of an exclusive (except as to
Teva) license under Teva's bivalirudin patents and right to enforce Teva's
bivalirudin patents.

On January 22, 2012, we settled our patent litigation with APP Pharmaceuticals
LLC, or APP, including our litigation with respect to the extension of the
patent term of the '404 patent and our patent infringement litigation with
respect to the '727 patent and the '343 patent. In connection with the APP
settlement, we entered into a license agreement with APP under which we granted
APP a non-exclusive license under the '727 patent and '343 patent to sell a
generic bivalirudin for injection product under an APP ANDA in the United States
beginning on May 1, 2019. In certain limited circumstances, the license to APP
could become effective prior to May 1, 2019. In addition, in certain limited
circumstances, this license to APP could include the right to sell a generic
bivalirudin product under our NDA for Angiomax in the United States beginning on
May 1, 2019 or, in certain limited circumstances, on June 30, 2019 or on a date
prior to May 1, 2019.

In September 2013, a three day bench trial was held regarding our patent
infringement litigation with Hospira, Inc., or Hospira, with respect to the '727
patent and '343 patent, and a post-trial briefing was completed in December
2013. On March 31, 2014, the court issued its trial opinion on the matter. With
respect to patent validity, the court held that the '727 and '343 patents were
valid on all grounds. Specifically, the court found that Hospira had failed to
prove that the patents were either anticipated and/or obvious. The court further
held that the patents satisfied the written description requirement, were
enabled and were not indefinite. With respect to infringement, based on its July
2013 Markman decision, the court found that Hospira's ANDAs did not meet the
"efficient mixing" claim limitation and thus did not infringe the asserted
claims of the '727 and '343 patents. The court found that the other claim
limitations in dispute were present in Hospira's ANDA products. The court
entered a final judgment on April 15, 2014. On May 9, 2014, a Notice of Appeal
to the United States Court of Appeals for the Federal Circuit was filed with the
Delaware Court. If the appeal is not successful, then Angiomax could be subject
to generic competition earlier than anticipated, including from Hospira's
generic bivalirudin, as well as potentially Teva's and APP's generic bivalirudin
products.

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We remain in patent infringement litigation involving the '727 patent and '343
patent with other ANDA filers, as described in Part II, Item 1, Legal
Proceedings, of this quarterly report on Form 10-Q. If we are unable to maintain
our market exclusivity for Angiomax in the United States through enforcement of
our U.S. patents covering Angiomax, then Angiomax could be subject to generic
competition earlier than May 1, 2019 and as early as June 15, 2015, the date of
expiration of the patent term of the '404 patent and the six month pediatric
exclusivity.

Cangrelor Regulatory Review
In February 2014, the FDA Cardiovascular and Renal Drugs Advisory Committee
advised against approval of cangrelor for use in patients undergoing PCI or
those that require bridging for oral antiplatelet therapy to surgery. On April
30, 2014, the FDA issued a Complete Response Letter for our NDA for cangrelor.

For the PCI indication, the FDA stated that the NDA cannot be approved at the
present time and the FDA suggested that we perform a series of clinical data
analyses of the CHAMPION PHOENIX study, review certain processes regarding data
management, and provide bioequivalence information on the clopidogrel clinical
supplies for the CHAMPION trials. For the BRIDGE indication, the FDA concluded
that a prospective, adequate and well-controlled study in which outcomes such as
bleeding are studied, can result in the clinical data necessary to assess the
benefit-risk relationship in this indication. The FDA also provided additional
comments for us to address, stating that the comments are not currently
approvability issues, but could affect labeling. We are focused on the
additional analyses in response to the FDA and are working with the FDA to
accommodate its review process in a timely manner.

Business Development Activity
Tenaxis Medical, Inc. In April 2014, we entered into an Agreement and Plan of
Merger with Tenaxis, Napa Acquisition Corp., our wholly owned subsidiary, and
Fortis Advisors LLC, a Delaware limited liability company, solely in its
capacity as the representative and agent of the stockholders and optionholders
of Tenaxis. On May 1, 2014, we completed our acquisition of Tenaxis and Tenaxis
became our wholly owned subsidiary.

In the United States, the Tenaxis product received a premarket approval from the
FDA in March 2013 for use as a vascular sealant, but Tenaxis has not yet
commercialized the Tenaxis product in the United States. We expect to begin
selling the Tenaxis product in the United States in the fourth quarter of 2014.

In the European Union, the Tenaxis product is approved for sale as a surgical
sealant applicable to cardiovascular, general, urological, and thoracic surgery
with a European CE Mark. Pursuant to this approval, Tenaxis has been selling the
product in the European Union since September 2008.

Under the merger agreement, we paid to the holders of Tenaxis's capital stock,
the holders of options to purchase shares of Tenaxis's capital stock (whether or
not such capital stock or options were vested or unvested as of immediately
prior to the closing) and the holders of certain warrants and side letters,
which we refer to collectively as the Tenaxis equityholders, an aggregate of
$58.0 million in cash, subject to customary adjustments at and after the
closing. At the closing, we also deposited $5.4 million of the purchase price
into an escrow fund for the purposes of securing the indemnification obligations
of the Tenaxis equityholders to us for any and all losses for which we are
entitled to indemnification pursuant to the merger agreement and to provide the
source of recovery for any amounts payable to us as a result of the post-closing
purchase price adjustment process. To the extent that any amounts remain in the
escrow fund after October 1, 2015 and not subject to claims by us, such amounts
will be released to the Tenaxis equityholders, subject to certain conditions set
forth in the merger agreement.

In addition, we have agreed to pay to the Tenaxis equityholders milestone
payments subsequent to the closing, if we achieve certain regulatory approval
milestones and commercial net sales milestones with respect to the Tenaxis
product, at the times and on the conditions set forth in the merger agreement.

In the event that all of the milestones set forth in the merger agreement are
achieved in accordance with the terms of the merger agreement, we will pay the
Tenaxis equityholders up to an additional $112.0 million in cash in the
aggregate.

Promus PREMIER Stent System Co-Promotion. In December 2013, we entered into a
co-promotion agreement with BSX for the Promus PREMIER Stent System. Under the
terms of the co-promotion agreement, in January 2014, our acute cardiovascular
care sales force began a collaboration with the BSX Interventional Cardiology
sales force to provide promotional support for the Promus PREMIER Stent System
in U.S. hospitals. The Promus PREMIER Stent System combines a platinum chromium
alloy stent, everolimus drug (manufactured by Novartis) and polymer coating, and
a stent delivery system. Under the terms of the agreement, BSX paid us $2.5
million in December 2013 upon completion of certain training activities and has
agreed to pay quarterly, performance-based payments if BSX's drug-eluting stent
sales in the U.S. exceed certain targets as specified in the agreement. In
addition, under the terms of the agreement, BSX has agreed to pay us an
additional fee if yearly sales exceed a certain amount specified in the
agreement and a fee if the agreement is still in effect at a certain date as
specified in the agreement.

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Rempex Pharmaceuticals, Inc. In December 2013, we acquired Rempex
Pharmaceuticals, Inc., or Rempex, a company focused on the discovery and
development of new antibacterial drugs to meet the growing clinical need created
by multi-drug resistant bacterial pathogens. As a result of the transaction, we
acquired Rempex's marketed product, Minocin IV, a broad-spectrum tetracycline
antibiotic, and Rempex's portfolio of product candidates, including Rempex's
RPX-602, a proprietary reformulation of Minocin IV utilizing magnesium sulfate,
Rempex's Carbavance product candidate, an investigational agent that is a
combination of RPX-7009, a proprietary, novel beta-lactamase inhibitor, with a
carbapenem, and Rempex's other product candidates. Upon the completion of the
acquisition, Rempex became our wholly owned subsidiary.

Under the merger agreement for the acquisition, we paid to the holders of
Rempex's capital stock, the holders of options to purchase shares of Rempex's
capital stock and the holders of certain phantom stock units, which we
collectively refer to as the Rempex equityholders, an aggregate of approximately
$140.0 million in cash, plus approximately $0.3 million in purchase price
adjustments.

In addition, we agreed to pay to the Rempex equityholders milestone payments
subsequent to the closing, if we achieve certain development and regulatory
approval milestones and commercial sales milestones with respect to Minocin IV,
RPX-602, Carbavance and Rempex's other product candidates, at the times and on
the conditions set forth in the merger agreement. In the event that all of the
milestones set forth in the merger agreement are achieved in accordance with the
terms of the merger agreement, we will pay the Rempex equityholders an
additional $214.0 million in cash in the aggregate for achieving development and
regulatory milestones and an additional $120.0 million in cash in the aggregate
for achieving commercial milestones, in each case, less certain transaction
expenses and employer taxes owing because of the milestone payments.

In the event that any milestone payments become due within eighteen months
following the closing, we will enter into an escrow agreement and deposit the
first $14.0 million of the aggregate milestone payments into an escrow fund. To
the extent that any amounts remain in the escrow fund after June 3, 2015 and not
subject to claims by us, such amounts will be released to the Rempex
equityholders, subject to certain conditions set forth in the merger agreement.

We accounted for the Rempex transaction as a business combination and the
results of Rempex's operations have been included in the consolidated statements
of income from the date of acquisition.

ProFibrix B.V. On August 5, 2013, we completed our acquisition of all of the
outstanding equity of ProFibrix B.V, or ProFibrix, pursuant to a share purchase
agreement entered into with ProFibrix and its equityholders on June 4, 2013.

Under the share purchase agreement, the closing of the transaction was subject
to our satisfactory review of the then pending Phase 3 clinical trial results of
ProFibrix's lead biologic, Fibrocaps. In connection with entering into the
agreement, we paid ProFibrix a $10.0 million option payment. Upon the completion
of the acquisition, ProFibrix became our wholly owned subsidiary.

ProFibrix does not have any marketed products and has been engaged since its
inception in developing fibrinogen based products for the hemostasis and
regenerative medicine markets. Fibrocaps, the proposed name of ProFibrix's lead
biologic, is a dry powder topical formulation of fibrinogen and thrombin being
developed to help stop bleeding during surgery. On August 5, 2013, in connection
with the closing, we announced that the Phase 3 clinical trial of Fibrocaps,
FINISH-3, which studied 719 surgical patients with mild to moderate surgical
bleeding, met all primary and secondary hemostasis efficacy endpoints in four
distinct surgical indications of spinal surgery, hepatic resection, soft tissue
dissection and vascular surgery.

Following our review of the Phase 3 trial results, on August 2, 2013, we
notified ProFibrix that we wished to proceed with the consummation of the
transaction. At the closing, we paid an aggregate purchase price of $90.9
million in cash. We deposited $9.0 million of the purchase price into an escrow
fund for the purpose of (i) securing the indemnification obligations of the
ProFibrix equityholders and optionholders to us for any and all losses for which
we are entitled to indemnification under the share purchase agreement, and (ii)
providing the source of recovery for any amounts payable to us as a result of
the post-closing purchase price adjustment process. To the extent that any
amounts remain in the escrow fund after December 4, 2015 and not subject to
claims by us, such amounts will be released to the ProFibrix equityholders,
subject to certain conditions set forth in the merger agreement.

Under the terms of the share purchase agreement, we are also obligated to pay up
to an aggregate of $140.0 million in cash to the ProFibrix equityholders and
optionholders upon the achievement of certain U.S. and European regulatory
approvals prior to January 1, 2016 and certain U.S. and European sales
milestones during the 24-month period that follows the initial commercial sale
of Fibrocaps. As a result of our acquisition of ProFibrix, we acquired a
portfolio of patents and patent applications, including patents licensed from
Quadrant Drug Delivery Limited, or Quadrant, which included the U.S. patent
directed to the composition of matter of Fibrocaps. Under the terms of a license
agreement between ProFibrix and Quadrant, we are required to pay low single
digit percentage royalties based on annual worldwide net sales of licensed
products, including Fibrocaps, by us or our affiliates and sublicensees. The
royalties are subject to reduction in specified circumstances.

27
--------------------------------------------------------------------------------We accounted for the ProFibrix transaction as a business combination and the
results of ProFibrix's operations have been included in the consolidated
statements of income from the date of acquisition.

ALN-PCS Program. In February 2013, we entered into a license and collaboration
agreement with Alnylam Pharmaceuticals, Inc., or Alnylam, to develop,
manufacture and commercialize therapeutic products targeting the human PCSK-9
gene based on certain of Alnylam's RNAi technology. Under the terms of the
agreement, we obtained the exclusive, worldwide right under Alnylam's technology
to develop, manufacture and commercialize PCSK-9 products for the treatment,
palliation and/or prevention of all human diseases. We paid Alnylam $25.0
million in an initial license payment and agreed to pay up to $180.0 million in
cash to Alnylam upon the achievement of certain milestones, including up to
$30.0 million in cash upon the achievement of specified development milestones,
up to $50.0 million in cash upon the achievement of specified regulatory
milestones and up to $100.0 million in cash upon the achievement of specified
commercialization milestones. In addition, Alnylam will be eligible to receive
scaled double-digit royalties based on annual worldwide net sales of PCSK-9
products by us or our affiliates and sublicensees. Royalties to Alnylam are
payable on a product-by-product and country-by-country basis until the last to
occur of the expiration of patent rights in the applicable country that cover
the applicable product, the expiration of non-patent regulatory exclusivities
for such product in such country, and the twelfth anniversary of the first
commercial sale of the product in such country. The royalties are subject to
reduction in specified circumstances. We are also responsible for paying
royalties, and in some cases milestone payments, owed by Alnylam to its
licensors with respect to intellectual property covering these products.

Recothrom. In February 2013, pursuant to a master transaction agreement with
Bristol-Myers Squibb Company, or BMS, we acquired the right to sell, distribute
and market Recothrom on a global basis for a two-year period, which we refer to
as the collaboration term, and certain limited assets exclusively related to
Recothrom, primarily the biologics license application for Recothrom and certain
related regulatory assets. BMS also granted to us, under the master transaction
agreement, an option to purchase from BMS and its affiliates, following the
expiration or earlier termination of the collaboration term, certain other
assets, including certain patent and trademark rights, contracts, inventory,
equipment and related books and records, held by BMS which are exclusively
related to Recothrom.

Under the master transaction agreement, we paid to BMS a one-time collaboration
fee equal to $105.0 million and a one-time option fee equal to $10.0 million. We
did not assume, and if we exercise the option, we will not assume, any
pre-existing liabilities related to the Recothrom business, contingent or
otherwise, arising prior to the collaboration period, and we did not acquire,
and if we exercise the option, we will not acquire, any significant tangible
assets related to the Recothrom business. Under the master transaction
agreement, we agreed to pay to BMS quarterly tiered royalty payments during the
two-year collaboration term equal to a percentage of worldwide net sales of
Recothrom.

If we exercise the option, we would acquire such assets and assume certain
liabilities of BMS and its affiliates related to those assets and to pay to BMS
a purchase price equal to the net book value of inventory included in the
acquired assets, plus either:
• a multiple of average net sales over each of the two 12-month periods
preceding the closing of the purchase of the assets to be acquired in
connection with exercising the option (unless such closing occurs less than 24 months after February 8, 2013, in which case the measurement
period would be the 12-month period preceding such closing); or
• if BMS has delivered a valid notice terminating the collaboration term early as a result of a material breach by us under the master transaction
agreement, the amount described above plus an amount intended to give BMS
the economic benefit of having received royalty fees for a 24-month
collaboration term.

We accounted for the Recothrom transaction as a business combination and the
results of Recothrom's operations have been included in the consolidated
statements of income from the date of acquisition.

Incline Therapeutics, Inc. In January 2013, we acquired Incline
Therapeutics, Inc., or Incline, a company focused on the development of IONSYS,
a compact, disposable, needleless patient-controlled system for the short-term
management of acute postoperative pain in the hospital setting.

Under the terms of our agreement with Incline, we paid to the holders of
Incline's capital stock and the holders of options to purchase shares of
Incline's capital stock, or collectively, the Incline equityholders, an
aggregate of approximately $155.2 million in cash. In addition, we also paid
$13.0 million to Cadence Pharmaceuticals, Inc., or Cadence, to terminate
Cadence's option to acquire Incline pursuant to an agreement between Cadence and
Incline and deposited $18.5 million in cash into an escrow fund for the purposes
of securing the indemnification obligations of the Incline equityholders to us
for any and all losses for which we are entitled to indemnification pursuant to
the merger agreement and to provide the source of recovery for any amounts
payable to us as a result of the post-closing purchase price adjustment process.

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Under the terms of our agreement with Incline, we agreed to pay up to $205.0
million in cash in the aggregate, less certain transaction expenses and taxes,
to the former Incline equityholders upon our entering into a license agreement
in Japan and achieving certain regulatory approval and certain sales milestones
with respect to IONSYS.

We accounted for the Incline transaction as a business combination, and the
results of Incline's operations have been included in the consolidated
statements of income from the date of acquisition.

Collaboration with AstraZeneca. On April 25, 2012, we entered into a global
collaboration agreement with AstraZeneca, LP, or AstraZeneca, pursuant to which
we and AstraZeneca agreed to collaborate globally to develop and commercialize
certain acute ischemic heart disease compounds. Under the terms of the
collaboration agreement, a joint development and research committee and a joint
commercialization committee have been established to prepare and deliver a
global development plan and a country-by-country collaboration and
commercialization plan, respectively, related to BRILINTA and Angiomax and
cangrelor. Implementation of these plans is subject to agreement between both
parties. The first joint activity agreed upon by the parties under the global
collaboration is a four-year co-promotion arrangement for BRILINTA in the United
States. Pursuant to the agreement, our sales force began supporting promotion
activities for BRILINTA in May 2012. Under the terms of the agreement,
AstraZeneca paid us $2.5 million for conducting BRILINTA co-promotion activities
in the second quarter of 2012. In addition, under the terms of the agreement,
AstraZeneca paid us $7.5 million in base consideration for conducting BRILINTA
co-promotion activities during the period from July 1, 2012 to December 31, 2012
and agreed to pay us $15.0 million in base consideration per year from 2013
through 2015 for conducting BRILINTA co-promotion activities, plus up to an
additional $5.0 million per year from 2013 to 2015 if certain performance
targets with respect to new prescriptions are achieved and $7.5 million in base
consideration for conducting BRILINTA co-promotion activities during the period
from January 1, 2016 until June 30, 2016, plus up to an additional $2.5 million
in additional consideration for the same period if certain performance targets
with respect to new prescriptions are achieved. In the first three months of
2014, AstraZeneca has paid us $4.4 million under the agreement.

Targanta Therapeutics Corporation. In February 2009, we acquired Targanta
Therapeutics Corporation, or Targanta, a biopharmaceutical company focused on
developing and commercializing innovative antibiotics to treat serious
infections in the hospital and other institutional settings.

Under the terms of our agreement with Targanta, we paid Targanta shareholders an
aggregate of approximately $42.0 million in cash at closing. In addition, we
originally agreed to pay contingent cash payments up to an additional $90.4
million in the aggregate. This amount has been reduced to $49.4 million as
certain milestones have not been achieved by specified dates. We will owe $49.4
million if aggregate net sales of oritavancin in four consecutive calendar
quarters ending on or before December 31, 2021 reach or exceed $400.0 million,
and up to an additional $40.0 million in additional payments to other third
parties.

BARDA Agreement
In February 2014, our subsidiary Rempex entered into an agreement with the
Biomedical Advanced Research and Development Authority, or BARDA, of the U.S.

Department of Health and Human Services, under which Rempex has the potential to
receive up to $89.8 million in funding to support the development of Carbavance.

The BARDA agreement is a cost-sharing arrangement that consists of an initial
base period and seven option periods that BARDA may exercise in its sole
discretion pursuant to the BARDA agreement. The BARDA agreement provides for an
initial commitment by BARDA of an aggregate of $19.8 million for the initial
base period and the first option period, and up to an additional $70.0 million
if the remaining six option periods are exercised by BARDA. Under the
cost-sharing arrangement, Rempex will be responsible for a designated portion of
the costs associated with each period of work. If all option periods are
exercised by BARDA, the estimated period of performance would be extended until
approximately July 31, 2019. BARDA is entitled to terminate the agreement,
including the projects under the BARDA agreement for convenience, in whole or in
part, at any time and is not obligated to provide continued funding beyond
current year amounts from Congressionally approved annual appropriations. We
expect to use the total award under the BARDA agreement to support non-clinical
development activities, clinical studies, manufacturing and associated
regulatory activities designed to obtain marketing approval of Carbavance in the
United States for treatment of serious gram-negative infections. The BARDA
agreement also covers initial non-clinical studies to assess the potential
usefulness of Carbavance for treatment of certain gram-negative bioterrorism
agents.

29--------------------------------------------------------------------------------Shelf Registration Statement and Equity Financing
On August 12, 2013, we filed a shelf registration statement on Form S-3 with the
SEC, which was automatically effective upon filing. This shelf registration
statement permits us to offer, from time to time, an unspecified amount of debt
securities, common stock, preferred stock, depositary shares, purchase
contracts, purchase units and warrants. On August 19, 2013, we sold an aggregate
of 6,652,891 shares of our common stock in an underwritten public offering at a
price to the public of $30.25 per share. We received net proceeds of
approximately $189.6 million from the sale of shares in the offering, including
the net proceeds from the exercise in full by the underwriters of an option to
purchase additional shares of common stock, and after deducting underwriting
discounts and commissions and offering expenses payable by us.

Convertible Senior Note Offering
On June 11, 2012, we completed our private offering of $275.0 million aggregate
principal amount of our 1.375% convertible senior notes due 2017, or the Notes,
and entered into an indenture with Wells Fargo Bank, National Association, a
national banking association, as trustee, or the Trustee, governing the Notes,
which we refer to as the Indenture. The net proceeds from the offering were
$266.2 million, after deducting the initial purchasers' discounts and
commissions and our offering expenses.

The Notes bear cash interest at a rate of 1.375% per year, payable semi-annually
on June 1 and December 1 of each year. The Notes will mature on June 1, 2017.

The Notes do not contain any financial or operating covenants or any
restrictions on the payment of dividends, the incurrence of other indebtedness,
or the issuance or repurchase of securities by us.

The Notes are our senior unsecured obligations and will rank senior in right of
payment to our future indebtedness, if any, that is expressly subordinated in
right of payment to the Notes and equal in right of payment to our existing and
future unsecured indebtedness that is not so subordinated. The Notes are
effectively junior in right of payment to any of our secured indebtedness to the
extent of the value of the assets securing such indebtedness and are
structurally junior to all existing and future indebtedness and other
liabilities, including trade payables, incurred by our subsidiaries.

Holders may convert their Notes at their option at any time prior to the close
of business on the business day immediately preceding March 1, 2017 only under
certain specified circumstances which are set forth in the Indenture. Pursuant
to the terms of the Indenture, holders of the Notes were able to elect to
convert their notes during the first quarter of 2014 as a result of the price of
our common stock during the fourth quarter of 2013. On or after March 1, 2017,
until the close of business on the second scheduled trading day immediately
preceding the maturity date, holders may convert their Notes at any time,
regardless of the foregoing circumstances. Upon conversion, we will pay cash up
to the aggregate principal amount of the Notes to be converted and deliver
shares of our common stock in respect of the remainder, if any, of our
conversion obligation in excess of the aggregate principal amount of the Notes
being converted, subject to a daily share cap, as described in the Indenture.

Holders of Notes will not receive any additional cash payment or additional
shares representing accrued and unpaid interest, if any, upon conversion of a
note, except in limited circumstances. Instead, accrued but unpaid interest will
be deemed to be paid by the cash and shares, in any, of our common stock,
together with any cash payment for any fractional share, paid or delivered, as
the case may be, upon conversion of a Note.

The conversion rate for the Notes was initially, and remains, 35.8038 shares of
our common stock per $1,000 principal amount of Notes, which is equivalent to an
initial conversion price of $27.93 per share of our common stock. The conversion
rate and the conversion price are subject to customary adjustments for certain
events, including, but not limited to, the issuance of certain stock dividends
on our common stock, the issuance of certain rights or warrants, subdivisions,
combinations, distributions of capital stock, indebtedness, or assets, cash
dividends and certain issuer tender or exchange offers, as described in the
Indenture.

We may not redeem the Notes prior to maturity and are not required to redeem or
retire the Notes periodically. However, upon the occurrence of a "fundamental
change", as defined in the Indenture, subject to certain conditions, in lieu of
converting their Notes, holders may require us to repurchase for cash all or
part of their Notes at a repurchase price equal to 100% of the principal amount
of the Notes to be repurchased, plus accrued and unpaid interest to, but
excluding, the fundamental change repurchase date. Following certain corporate
transactions that constitute a change of control, we will increase the
conversion rate for a holder who elects to convert the Notes in connection with
such change of control in certain circumstances.

The Indenture contains customary events of default with respect to the Notes,
including that upon certain events of default, including our failure to make any
payment of principal or interest on the Notes when due and payable, occurring
and continuing, the Trustee by notice to us, or the holders of at least 25% in
principal amount of the outstanding Notes by notice to us and the Trustee, may,
and the Trustee at the request of such holders, subject to the provisions of the
Indenture, shall, declare 100% of the principal of and accrued and unpaid
interest, if any, on all the Notes to be due and payable. In case of an event
of default involving certain events of bankruptcy, insolvency or reorganization,
involving us or a significant subsidiary of ours, 100% of the principal of and
accrued and unpaid interest on the Notes will automatically become due and
payable. Upon a declaration of acceleration, such principal and accrued and
unpaid interest, if any, will be due and payable immediately
30
--------------------------------------------------------------------------------
Convertible Note Hedge and Warrant Transactions
On June 5, 2012, we entered into convertible note hedge transactions and warrant
transactions with several of the initial purchasers of the Notes, their
respective affiliates and other financial institutions, which we refer to as the
Hedge Counterparties. We used approximately $19.8 million of the net proceeds
from the offering of the Notes to pay the cost of the convertible note hedge
transactions, after such cost was partially offset by the proceeds to us from
the sale of warrants in the warrant transactions.

We expect the convertible note hedge transactions to reduce the potential
dilution with respect to shares of our common stock upon any conversion of the
Notes in the event that the market price per share of our common stock, as
measured under the terms of the convertible note hedge transactions, is greater
than the strike price of the convertible note hedge transactions, which
initially corresponds to the conversion price of the Notes and is subject to
anti-dilution adjustments substantially similar to those applicable to the
conversion rate of the Notes. The warrant transactions will have a dilutive
effect with respect to our common stock to the extent that the market price per
share of our common stock, as measured under the terms of the warrant
transactions, exceeds the applicable strike price of the warrants. However,
subject to certain conditions, we may elect to settle all of the warrants in
cash.

Biogen Letter Agreement
On August 7, 2012, we and Biogen Idec MA Inc., or Biogen, entered into a letter
agreement resolving a disagreement between the parties as to the calculation and
amount of the royalties required to be paid to Biogen by us under our license
agreement with Biogen. The letter agreement amends the license agreement
providing, among other things, that effective solely for the period from January
1, 2013 through and including December 15, 2014, each of the royalty rate
percentages payable by us as set forth in the license agreement shall be
increased by one percentage point.

U.S. Health Care Reform
In March 2010, President Obama signed into law the Patient Protection and
Affordable Care Act, or PPACA, which was amended by the Health Care and
Education Reconciliation Act of 2010. The PPACA, as amended, contains numerous
provisions that impact the pharmaceutical and healthcare industries that are
expected to be implemented over the next several years. We are continually
evaluating the impact of the PPACA on our business. As of the date of this
quarterly report on Form 10-Q, we have not identified any provisions that
currently materially impact our business or results of operations. However, we
believe that the Biologics Price Competition and Innovation Act, or BPCIA,
provisions of PPACA could impact our business or results of operations. Under
the BPCIA, the FDA has the authority to approve biosimilar interchangeable
versions of biological products through an abbreviated pathway following periods
of data and marketing exclusivity. However, the potential impact of the PPACA
and the BPCIA on our business and results of operations is inherently difficult
to predict because many of the details regarding the implementation of this
legislation have not been determined. In addition, the impact on our business
and results of operations may change as and if our business evolves.

On July 9, 2012, President Obama signed the Food and Drug Administration Safety
and Innovation Act, or FDASIA. Under the "Generating Antibiotic Incentives Now,"
or GAIN, provisions of FDASIA, the FDA may designate a product as a qualified
infectious disease product, or QIDP. A QIDP is defined as an antibacterial or
antifungal drug for human use intended to treat serious or life-threatening
infections, including those caused by either an antibacterial or antifungal
resistant pathogen, including novel or emerging infectious pathogens or a
so-called "qualifying pathogen" found on a list of potentially dangerous,
drug-resistant organisms to be established and maintained by the FDA under the
new law. The GAIN provisions describe several examples of "qualifying
pathogens," including methicillin-resistant Staphylococcus aureus, or MRSA, and
Clostridium difficile. Upon the designation of a drug by the FDA as a QIDP, any
non-patent exclusivity period awarded to the drug will be extended by an
additional five years. This extension is in addition to any pediatric
exclusivity extension awarded.

We are developing oritavancin for the treatment of ABSSSI, including infections
caused by MRSA, and are exploring the development of oritavancin for other
indications, including for the treatment of Clostridium difficile, prosthetic
joint infections, anthrax and other Gram-positive bacterial infections. We are
also developing Carbavance for the treatment of hospitalized patients with
serious gram-negative bacterial infections. In November 2013, the FDA designated
oritavancin a QIDP, and in January 2014, the FDA designated Carbavance a QIDP.

As a result, we expect the non-patent exclusivity that would be awarded to
oritavancin and Carbavance if their respective NDAs were approved would be
extended by an additional five years.

31--------------------------------------------------------------------------------
Results of Operations
Net Revenue:
Net revenue increased 13.8% to $177.2 million for the three months ended
March 31, 2014 as compared to $155.8 million for the three months ended
March 31, 2013.

The following tables reflect the components of net revenue for the three months
ended March 31, 2014 and 2013:
Net Revenue
Three Months Ended March 31,
Change Change
2014 2013 $ %
(in thousands)
Angiomax $ 155,704 $ 142,885 $ 12,819 9.0 %
Recothrom 13,494 8,622 4,872 56.5 %
Cleviprex/Ready-to-Use Argatroban/Minocin IV 8,037 4,246 3,791 89.3 %
Total net revenue $ 177,235 $ 155,753 $ 21,482 13.8 %
Net revenue increased by $21.5 million, or 13.8%, to $177.2 million in the three
months ended March 31, 2014 compared to $155.8 million in the three months ended
March 31, 2013, reflecting an increase of $23.3 million, or 16.1%, in the United
States and a decrease of $1.8 million, or 15.6%, in international markets. The
net revenue increase for Angiomax was $12.8 million, which was comprised of net
volume increases of $10.1 million due to increased unit shipments to customers
of Angiomax, price increases of $2.4 million, principally due to a price
increase for Angiomax effective as of January 1, 2014 and a favorable impact
from foreign exchange of $0.3 million. In addition, net revenue increased by
$4.9 million for Recothrom due to the full quarter effect of sales during the
first quarter of 2014, as we first began selling Recothrom in the United States
in February 2013.

Angiomax. Net revenue from sales of Angiomax increased by $12.8 million, or
9.0%, to $155.7 million in the three months ended March 31, 2014 compared to
$142.9 million in the three months ended March 31, 2013, primarily due to volume
increases in the United States. Net revenue in the United States in both the
three months ended March 31, 2014 and 2013 reflect chargebacks related to the
340B Drug Pricing Program and rebates related to the PPACA. Under the 340B Drug
Pricing Program, we offer qualifying entities a discount off the commercial
price of Angiomax for patients undergoing PCI on an outpatient basis.

Chargebacks related to the 340B Drug Pricing Program increased by $2.8 million
to $13.5 million in the three months ended March 31, 2014 compared to $10.7
million in the three months ended March 31, 2013, primarily due to higher
amounts paid to eligible hospital customers. Rebates related to the PPACA
increased by $0.4 million to $0.7 million in the three months ended March 31,
2014 compared to $0.3 million in the three months ended March 31, 2013.

Recothrom. Net revenue from Recothrom increased by $4.9 million, or 56.5%, to
$13.5 million in the three months ended March 31, 2014 compared to $8.6 million
in the three months ended March 31, 2013 due to full quarter of sales during the
first quarter of 2014. We commenced sales of Recothrom on February 8, 2013
pursuant to the master transaction agreement with BMS.

Cleviprex/Ready-to-Use Argatroban/Minocin IV. Net revenue from sales of
Cleviprex, ready-to-use Argatroban and Minocin IV increased by $3.8 million, or
89.3%, to $8.0 million in the three months ended March 31, 2014 from $4.2
million in the three months ended March 31, 2013, primarily due to the change in
our revenue recognition method for Cleviprex and ready-to-use Argatroban in the
first quarter of 2014. Under our revised revenue recognition policy, beginning
with the first quarter for 2014, we recognize revenue for Cleviprex and
ready-to-use Argatroban as product is sold to Integrated Commercialization
Solutions, or ICS. For periods prior to the first quarter of 2014, we recognized
revenue for Cleviprex and ready-to-use Argatroban using the deferred revenue
model. For the three months ended March 31, 2014, we recognized one-time
increases of $0.7 million in net sales of Cleviprex and $1.6 million in net
sales of ready-to-use Argatroban, representing product sales previously deferred
as of December 31, 2013, net of chargebacks and other discounts or accruals for
product returns, rebates and fee-for-service charges. Net revenue from sales of
Cleviprex was $2.6 million in the three months ended March 31, 2014, compared to
$1.1 million in the three months ended March 31, 2013. Net revenue from sales of
ready-to-use Argatroban was $5.0 million in the three months ended March 31,
2014, compared to $3.1 million in the three months ended March 31, 2013. Net
revenue from sales of Minocin IV was $0.4 million in the three months ended
March 31, 2014. We commenced sales of Minocin IV in December 2013 after the
acquisition of Rempex.

32
--------------------------------------------------------------------------------
Cost of Revenue:
Cost of revenue in the three months ended March 31, 2014 was $66.9 million, or
37.7% of net revenue, compared to $56.7 million, or 36.4% of net revenue, in the
three months ended March 31, 2013.

Cost of revenue during these periods consisted of:
• expenses in connection with the manufacture of our products sold;
• royalty expenses under our agreements with Biogen and Health Research Inc.

related to Angiomax, our agreement with AstraZeneca related to Cleviprex
and our agreement with Eagle Pharmaceuticals, Inc., or Eagle, related to
ready-to-use Argatroban;
• amortization of the costs of license agreements, product rights and other
identifiable intangible assets, which result from product and business
acquisitions;
• logistics costs related to Angiomax, Cleviprex, Minocin IV and ready-to-use Argatroban, including distribution, storage, and handling
costs; and
• expenses related to our license agreement with BMS for Recothrom and expenses related to our supply agreement for Recothrom with BMS including
product cost and logistics as well as royalties and amortization related
to Recothrom.

Cost of Revenue
Three Months Ended March 31,
2014 % of Total 2013 % of Total
(in thousands) (in thousands)
Manufacturing/Logistics $ 21,291 31 % $ 18,651 33 %
Royalties 40,493 61 % 34,262 60 %
Amortization of product rights
and intangible assets 5,083 8 % 3,801 7 %
Total cost of revenue $ 66,867 100 % $ 56,714 100 %
Cost of revenue increased by $10.2 million during the three months ended
March 31, 2014 compared to the three months ended March 31, 2013 primarily due
to an increase in royalty expense to Biogen and due to an increase in royalties
to BMS in connection with our sales of Recothrom for a full quarter for the
three months ended March 31, 2014 as compared to a partial quarter during 2013
as a result of our commencement of selling Recothrom in February 2013. Increased
manufacturing and logistics costs were associated with our sales of Recothrom
for the full quarter in 2014. The increase in amortization of product rights and
intangible assets reflects the full quarter 2014 amortization of product rights
and intangible assets associated with Recothrom.

Research and development expenses decreased by $27.1 million during the three
months ended March 31, 2014 compared to the three months ended March 31, 2013.

The decrease is primarily due to an initial license payment of $25.0 million to
Alnylam under our license and collaboration agreement in the first quarter of
2013. In addition, expenses associated with oritavancin decreased by $9.4
million primarily due to the completion of patient enrollment in SOLO II
clinical trials in April 2013 and expenses associated with cangrelor decreased
by $2.7 million due to the completion of our Phase 3 CHAMPION PHOENIX clinical
trial. Additional decreases during the three months ended March 31, 2014 include
$1.1 million due to a reduction-in-force during 2013 and a decrease in research
and development costs of $0.8 million due to the termination of license
agreement with CyDex Pharmaceuticals, Inc. in July of 2013. These decreases were
partially offset by increases in expenses associated with Carbavance and
Fibrocaps acquired during 2013 and our efforts to further develop Angiomax for
use in additional patient populations globally. Clinical trial expenses and
manufacturing development expenses associated with Carbavance increased by $6.1
million following our December 2013 acquisition of Rempex. Manufacturing
development and regulatory filing related costs associated with Fibrocaps
increased by $5.8 million following our August 2013 acquisition of ProFibrix.

We expect to continue to invest in the development of all our products during
the remainder of 2014 and that our research and development expenses will
increase in 2014 from their levels in 2013. We expect research and development
expenses in 2014 to include costs for global regulatory activities related to
oritavancin and IONSYS in the United States and European Union, and for
Cleviprex, cangrelor and Fibrocaps outside of the United States; manufacturing
development activities for Carbavance, oritavancin, MDCO-216, and IONSYS, and
our clinical trials of MDCO-216 preparation for a Phase 2 study initiation,
initiation of a Phase 3 study for Carbavance and additional clinical studies for
Angiomax, cangrelor and Cleviprex for use in additional patient populations and
lifecycle management activities for all of our products.

Our success in further developing Angiomax and obtaining marketing approvals for
Angiomax in additional countries and for additional patient populations,
developing and obtaining marketing approvals for Cleviprex outside the United
States, and developing and obtaining marketing approvals for our products in
development, is highly uncertain. We cannot predict expenses associated with
ongoing data analysis or regulatory submissions, if any. In addition, we cannot
reasonably estimate or know the nature, timing and estimated costs of the
efforts necessary to continue the development of Angiomax, Cleviprex and our
products in development, the period in which material net cash inflows are
expected to commence from further developing Angiomax and Cleviprex, the timing
and estimated costs of obtaining marketing approvals for Angiomax in additional
countries and additional patient populations, the timing and estimated costs of
obtaining marketing approvals for Cleviprex outside the United States, or the
timing and estimated costs of developing and obtaining marketing approvals for
our products in development, due to the numerous risks and uncertainties
associated with developing and commercializing drugs, including the uncertainty
of:
• the scope, rate of progress and cost of our clinical trials and other
research and development activities;
• future clinical trial results;
• the terms and timing of any collaborative, licensing and other
arrangements that we may establish;
• the cost and timing of regulatory approvals;
• the cost and timing of establishing and maintaining sales, marketing and
distribution capabilities;
34--------------------------------------------------------------------------------• the cost of establishing and maintaining clinical and commercial supplies
of our products and product candidates;
• the effect of competing technological and market developments; and
• the cost of filing, prosecuting, defending and enforcing any patent claims
and other intellectual property rights.

Selling, General and Administrative Expenses:
Three Months Ended March 31,
2014 2013 Change $ Change %
(in thousands)Selling, general and administrative expenses $ 64,521 $ 63,482 $ 1,039 1.6 %
The increase in selling, general and administrative expenses of approximately
$1.0 million in the three months ended March 31, 2014 as compared to the three
months ended March 31, 2013 reflects a $3.9 million increase in selling,
marketing and promotional expense and a $2.9 million decrease in general
corporate and administrative expenses.

Selling, marketing and promotional expenses increased by $3.9 million, primarily
due to increased promotional efforts for our commercial products and spending in
preparation for the commercial sale of our late stage product candidates, if and
when approved.

General corporate and administrative expenses decreased by $2.9 million,
primarily due to a reduction of one-time expenses incurred during the three
months ended March 31, 2013 for our acquisitions of Incline and licensing of
Recothrom which contributed an aggregate of $3.6 million and the 2013
reduction-in-force employee severance and other employee related termination
costs of $4.4 million. These reductions were primarily offset by increases of
$2.1 million in share-based compensation costs and $2.7 million in accretion
costs associated with the fair value adjustments of the contingent consideration
due to the former equityholders of Targanta Therapeutics Corporation, or
Targanta, Incline, ProFibrix and Rempex.

Co-promotion and Profit-Share Income:
Three Months Ended March 31,
2014 2013 Change $ Change %
(in thousands)
Co-promotion and profit share income $ 6,020 $ 3,750 $ 2,270
60.5 %
During the three months ended March 31, 2014 and March 31, 2013, we recorded
co-promotion and profit share income of approximately $6.0 million and $3.75
million, respectively. Co-promotion and profit share income in the three months
ended March 31, 2014 was higher due to increases in co-promotion of BRILINTA in
the United States by approximately $0.6 million, profit share income from our
license agreement with Eagle related to ready-to-use Argatroban of $1.3 million
and co-promotion income from our agreement with BSX of $0.3 million.

Interest Expense:
Three Months Ended March 31,
2014 2013 Change $ Change %
(in thousands)
Interest expense $ (3,860 ) $ (3,674 ) $ (186 ) 5.1 %
35--------------------------------------------------------------------------------
During the three months ended March 31, 2014 and March 31, 2013, we recorded
approximately $3.9 million and $3.7 million in interest expense related to the
Notes.

Other Income:
Three Months Ended March 31,
2014 2013 Change $ Change %
(in thousands)
Other income $ 179 $ 198 $ (19 ) (9.6 )%
Other income, which is comprised of interest income and gains and losses on
foreign currency transactions remained unchanged for the three months ended
March 31, 2014 and March 31, 2014.

We recorded a $22.1 million provision for income taxes and a $10.8 million
benefit for income taxes for the three months ended March 31, 2014 and 2013,
respectively, based on income before taxes of $17.1 million and a loss before
taxes of $22.4 million for the same periods. Our effective income tax rates for
the three months ended March 31, 2014 and 2013 were approximately 129.3% and
48.2%, respectively. These increases in effective tax rate were driven primarily
by the non-cash tax impact arising from changes in contingent consideration
related to our acquisitions of Targanta, Incline, ProFibrix and Rempex. The 2014
effective tax rate also reflects higher tax losses in foreign jurisdictions from
which we are unable to record a benefit currently driven primarily by the
acquisition of ProFibrix. The 2013 effective tax rate also reflects the one time
income tax benefit arising from the retroactive reinstatement of the research
and development credit included in the American Tax Relief Act of 2012 which was
signed into law in January 2013 and which expired on December 31, 2013.

We expect that our full year effective tax rate will be higher than 2013 due to
an increase in nondeductible charges for changes in contingent consideration
related to our acquisitions, higher anticipated tax losses in foreign
jurisdictions from which we are unable to record a benefit currently, and the
December 31, 2013 expiration of the U.S. federal research and development tax
credit. It is also possible that our full-year effective tax rate could change
because of other discrete events, our mix of U.S. to foreign earnings, specific
transactions, or the receipt of new information affecting our current
projections.

We will continue to evaluate our future ability to realize our deferred tax
assets on a periodic basis in light of changing facts and circumstances. These
include but are not limited to projections of future taxable income, tax
legislation, rulings by relevant tax authorities, the progress of ongoing tax
audits, the regulatory approval of products currently under development and the
ability to achieve future anticipated revenues.

Liquidity and Capital Resources
Sources of Liquidity
Since our inception, we have financed our operations principally through
revenues from sales of Angiomax, the sale of common stock, convertible
promissory notes and warrants and interest income.

36--------------------------------------------------------------------------------Cash Flows
As of March 31, 2014, we had $378.4 million in cash and cash equivalents, as
compared to $376.7 million as of December 31, 2013. The increase in cash and
cash equivalents in the three months ended March 31, 2014 was primarily due to
$10.3 million of net cash provided by financing activities, partially offset by
$5.1 million of net cash used in operating activities and $3.4 million of net
cash used in investing activities.

Net cash used in operating activities was $5.1 million in the three months ended
March 31, 2014, compared to net cash used in operating activities of $48.0
million in the three months ended March 31, 2013. The cash used in operating
activities in the three months ended March 31, 2014 included a net loss of $5.0
million and a $20.5 million decrease resulting from changes in working capital
items. The changes in working capital items reflect a decrease in accounts
payable and accrued expenses of $11.8 million primarily due to timing of
payments of certain corporate expenses, a decrease of $4.1 million in deferred
revenue, a decrease of $2.6 million in other liabilities and an increase of $2.8
million in accounts receivable, partially offset by a decrease of $1.1 million
in inventory. These uses of cash were partially offset by non-cash items of
$20.4 million, consisting primarily of depreciation and amortization,
amortization of debt discount, share-based compensation expense, deferred tax
provision and excess tax benefit from share-based compensation arrangements.

Net cash used by operating activities in the three months ended March 31, 2013
included a net loss of $11.6 million, primarily due to an initial $25.0 million
license payment to Alnylam, and a decrease of $40.1 million resulting from
changes in working capital items, offset by non-cash items of $3.7 million
consisting primarily of share-based compensation expense, deferred tax provision
and depreciation and amortization. The changes in working capital items reflect
a decrease in accounts payable and accrued expenses of $17.4 million primarily
due to payments related to inventory of active pharmaceutical ingredient
bivalirudin and payment of certain corporate expenses, an increase in accounts
receivable of $4.9 million, which was due in part to the timing of receipts and
related sales volume, an increase in inventory of $8.0 million due to purchases
under our supply agreement with Teva API of certain minimum quantities of the
active pharmaceutical ingredient bivalirudin for our commercial supply and an
increase in prepaid and other current assets of $9.0 million primarily due to an
increase in prepaid corporate income and ad valorem taxes.

During the three months ended March 31, 2014, $3.4 million in net cash was used
in investing activities, primarily for the purchase of fixed assets.

During the three months ended March 31, 2013, $276.4 million in net cash was
used in investing activities, which reflected $301.7 million incurred in
connection with our Incline and Recothrom transactions, consisting of $186.7
million used in the acquisition of Incline and $115.0 million paid in the
Recothrom transaction, and the purchase of fixed assets and additional
investment in Annovation Biopharma Inc., offset by $27.1 million in proceeds
from the maturity and sale of available for sale securities.

Net cash provided by financing activities was $10.3 million in the three months
ended March 31, 2014, which reflected $8.6 million of proceeds from option
exercises and $1.7 million in excess tax benefits and purchases of stock under
our employee stock purchase plan.

We received $33.4 million in the three months ended March 31, 2013 in net cash
provided by financing activities, which reflected $29.7 million of proceeds from
option exercises and $3.6 million in excess tax benefits and purchases of stock
under our employee stock purchase plan.

37
--------------------------------------------------------------------------------Funding Requirements
We expect to devote substantial financial resources to our research and
development efforts, clinical trials, nonclinical and preclinical studies and
regulatory approvals and to our commercialization and manufacturing programs
associated with our products and our products in development. We also will
require cash to pay interest on the $275.0 million aggregate principal amount of
Notes and to make principal payments on the Notes at maturity or upon
conversion. In addition, we will require cash to make payments under the license
agreements and other acquisition agreements to which we are a party, including
potentially a payment to BMS, if we exercise the option granted to us, at a
purchase price equal to the net book value of inventory included in the acquired
assets. In addition, we may have to make contingent cash payments for our
acquisitions and our licensing arrangements of up to $49.4 million due to the
former equityholders of Targanta and up to $40.0 million in additional payments
to other third parties for the Targanta transaction, up to $205.0 million due to
the former equityholders of Incline and up to $115.5 million in additional
payments to other third parties for the Incline transaction, up to $140.0
million for the ProFibrix transaction, up to $334.0 million for the Rempex
transaction, up to $180.0 million for the license and collaboration agreement
with Alnylam, up to $422.0 million due to our licensing of MDCO-216 from Pfizer,
up to $54.5 million due to our licensing of cangrelor from AstraZeneca and up to
$112.0 million for the Tenaxis transaction, in each case, upon the achievement
of specified regulatory, sales and other milestones.

Our future capital requirements will depend on many factors, including:
• the extent to which Angiomax is commercially successful globally;
• our ability to maintain market exclusivity for Angiomax in the United
States through the enforcement of the '727 patent and the '343 patent
during the period following the expiration of the patent term of the '404
patent on December 15, 2014 and the six month pediatric exclusivity on June 15, 2015 through at least May 1, 2019, the date on which we agreed
APP may sell a generic version of Angiomax;
• the extent to which our submissions and planned submissions for regulatory
approval of cangrelor, oritavancin, IONSYS, Fibrocaps and RPX-602 are
approved on a timely basis, if at all;
• the extent to which Recothrom, Cleviprex, ready-to-use Argatroban, Minocin
IV, the Tenaxis product and the acute care generic products for which we
acquired the non-exclusive right to sell and distribute from APP are
commercially successful in the United States;
• the extent to which our global collaboration with AstraZeneca, including
our four-year co-promotion arrangement for BRILINTA in the United States,
and our co-promotion agreement with BSX for its Promus PREMIER Stent
System, are successful;
• the extent to which we are successful in our efforts to further establish
a commercial infrastructure outside the United States;
• the consideration paid by us and to be paid by us in connection with acquisitions and licenses of development-stage compounds, clinical-stage
product candidates, approved products, or businesses, and in connection
with other strategic arrangements;
• the progress, level, timing and cost of our research and development
activities related to our clinical trials and non-clinical studies with
respect to Angiomax, Cleviprex and our products in development;
• the cost and outcomes of regulatory submissions and reviews for approval
of Angiomax in additional countries and for additional indications, of
Recothrom and Cleviprex outside the United States and of our other
products in development globally;
• the continuation or termination of third-party manufacturing, distribution
and sales and marketing arrangements;
• the size, cost and effectiveness of our sales and marketing programs globally;
• the amounts of our payment obligations to third parties as to our products
and products in development; and
• our ability to defend and enforce our intellectual property rights.

38
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We believe that our cash on hand and the cash we generate from our operations
will be sufficient to meet our ongoing funding requirements, including our
obligations with respect to the Notes and under the license agreements and other
acquisition agreements to which we are a party, but excluding any future
material acquisition activity. If our existing cash resources, together with
revenues that we generate from sales of our products and other sources, are
insufficient to satisfy our funding requirements due to slower than anticipated
sales of Angiomax, Recothrom, Cleviprex, ready-to-use Argatroban and the acute
generic products for which we acquired the non-exclusive right to sell and
distribute from APP or higher than anticipated costs globally, we may need to
sell additional equity or debt securities or seek additional financing through
other arrangements. Any sale of additional equity or debt securities may result
in dilution to our stockholders. Debt financing may involve covenants limiting
or restricting our ability to take specific actions, such as incurring
additional debt or making capital expenditures. Moreover, our ability to obtain
additional debt financing may be limited by the Notes. We cannot be certain that
public or private financing will be available in amounts or on terms acceptable
to us, if at all. Further, we may seek additional financing to fund our
acquisitions of development stage compounds, clinical stage product candidates
and approved products and/or the companies that have such products, and we may
not be able to obtain such financing on terms acceptable to us or at all.

If we seek to raise funds through collaboration or licensing arrangements with
third parties, we may be required to relinquish rights to products, product
candidates or technologies that we would not otherwise relinquish or grant
licenses on terms that may not be favorable to us. If we are unable to obtain
additional financing, we may be required to delay, reduce the scope of, or
eliminate one or more of our planned research, development and commercialization
activities, which could harm our financial condition and operating results.

Certain Contingencies:
We may be, from time to time, a party to various disputes and claims arising
from normal business activities. We accrue for loss contingencies when
information available indicates that it is probable that a liability has been
incurred and the amount of such loss can be reasonably estimated.

Currently, we are party to the legal proceedings described in Part II, Item 1,
Legal Proceedings, of this quarterly report on Form 10-Q, which include both
patent litigation matters and class action litigation. We have assessed such
legal proceedings and do not believe that it is probable that a liability has
been incurred and the amount of such liability can be reasonably estimated. As a
result, we have not recorded a loss contingency related to these legal
proceedings.

Contractual Obligations
Our long-term contractual obligations include commitments and estimated purchase
obligations entered into in the normal course of business. These include
commitments related to royalties, milestone payments, option exercise and other
contingent payments due under our license and acquisition agreements, purchases
of inventory of our products, research and development service agreements,
income tax contingencies, operating leases, selling, general and administrative
obligations and increases to our restricted cash in connection with our lease of
our principal office space in Parsippany, New Jersey as of March 31, 2014.

During the quarter ended March 31, 2014, there were no material changes outside
the ordinary course of business to the specified contractual obligations set
forth in the contractual obligations table included in our annual report on Form
10-K for the year ended December 31, 2013.

Application of Critical Accounting Estimates
The discussion and analysis of our financial condition and results of operations
is based on our unaudited consolidated financial statements, which have been
prepared in accordance with U.S. generally accepted accounting principles, or
GAAP, for interim financial information and with the instructions to Form 10-Q.

Accordingly, they do not include all the information and footnotes required by
GAAP for complete financial statements. The preparation of these financial
statements requires us to make estimates and judgments that affect our reported
assets and liabilities, revenues and expenses, and other financial information.

Actual results may differ significantly from these estimates under different
assumptions and conditions. In addition, our reported financial condition and
results of operations could vary due to a change in the application of a
particular accounting standard.

We regard an accounting estimate or assumption underlying our financial
statements as a "critical accounting estimate" where:
• the nature of the estimate or assumption is material due to the level of
subjectivity and judgment necessary to account for highly uncertain
matters or the susceptibility of such matters to change; and
• the impact of the estimates and assumptions on financial condition or
operating performance is material.

39--------------------------------------------------------------------------------
Our significant accounting policies are more fully described in note 2 of our
unaudited consolidated financial statements in this quarterly report on Form
10-Q and note 2 of our consolidated financial statements in our annual report on
Form 10-K for the year ended December 31, 2013. Not all of these significant
accounting policies, however, require that we make estimates and assumptions
that we believe are "critical accounting estimates." We have discussed our
accounting policies with the audit committee of our board of directors, and we
believe that our estimates relating to revenue recognition, inventory,
share-based compensation, income taxes, in-process research and development,
contingent purchase price from business combinations and impairment of
long-lived asset described under the caption "Item 7. Management's Discussion
and Analysis of Financial Condition and Results of Operations - Application of
Critical Accounting Estimates" in our annual report on Form 10-K for the year
ended December 31, 2013 are "critical accounting estimates." Please refer to
note 2, "Significant Accounting Policies," in the accompanying notes to the
condensed consolidated financial statements for a discussion on changes to
certain accounting policies during the three months ended March 31, 2014.

Recent Accounting Pronouncements
Refer to Note 2, "Significant Accounting Policies," in the accompanying notes to
the condensed consolidated financial statements for a discussion of recent
accounting pronouncements. There were no new accounting pronouncements adopted
during the three months ended March, 2014 that had a material effect on our
financial statements.

Forward-Looking Information
This quarterly report on Form 10-Q includes forward-looking statements within
the meaning of Section 21E of the Securities Exchange Act of 1934, as amended,
or the Exchange Act. For this purpose, any statements contained herein regarding
our strategy, future operations, financial position, future revenue, projected
costs, prospects, plans and objectives of management, other than statements of
historical facts, are forward-looking statements. The words "anticipates,"
"believes," "estimates," "expects," "intends," "may," "plans," "projects,"
"will," "would" and similar expressions are intended to identify forward-looking
statements, although not all forward-looking statements contain these
identifying words. We cannot guarantee that we actually will achieve the plans,
intentions or expectations expressed or implied in our forward-looking
statements. There are a number of important factors that could cause actual
results, levels of activity, performance or events to differ materially from
those expressed or implied in the forward-looking statements we make. These
important factors include our "critical accounting estimates" described in Part
I, Item 2 of this quarterly report on Form 10-Q and the factors set forth under
the caption "Risk Factors" in Part II, Item 1A of this quarterly report on Form
10-Q. Although we may elect to update forward-looking statements in the future,
we specifically disclaim any obligation to do so, even if our estimates change,
and readers should not rely on those forward-looking statements as representing
our views as of any date subsequent to the date of this quarterly report on Form
10-Q.